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TMI Blog2020 (8) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... ck was worth ₹ 1561.87 Crores without official valuation got done is not helpful. With regard to Counter claim is concerned, the Adjudicating Authority cannot decide while admitting the Application. As such, all the essential requirements have been fulfilled and Application under Section 7 IBC was rightly admitted by the Adjudicating Authority - The Counter Claim and the set off as claimed by the Appellant herein cannot be decided either by the Adjudicating Authority or by this Appellate Tribunal, such issues not decided. Appeal dismissed. - Company Appeal (AT)(Insolvency) No. 723 of 2019 - - - Dated:- 25-2-2020 - [Justice A.I.S. Cheema] Member (Judicial) , (Kanthi Narahari) Member(Technical) And (V P Singh) Member(Technical) For the Appellant : Mr. Mahesh Agarwal, Shri Arshit Anand, Shri Abhijeet Sinha, Shri Himanshu Satija, Mr. Rohan Talwar, and Shri Saikat Sarkar, Advocates For the Respondents : Mr. Ashish Rana, Shri Ankit Paushyayan, Mr. Arurag Singh Advocates JUDGMENT KANTHI NARAHARI, MEMBER (TECHNICAL) The Appellant, a shareholder/promotor and Director of Respondent No. 2 herein has filed the present Appeal challenging the admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank by way of Loan Recall Notice dated 02.05.2016 informed Respondent No. 2 that its account with ICICI Bank had been classified as Non- Performing Asset ( NPA ) with effect from 31.03.2016. It is stated that the Respondent No. 2, on 09.05.2016, replied to the said Notice setting out that it was facing temporary financial difficulties and clarified that the Company was taking steps for regularisation of its loan account and that the other lenders have verbally considered its request and hence not to take any coercive step, till 31.05.2016. In June, 2016, ICICI filed O.A. No. 406/2016 before the Debt Recovery Tribunal (in short DRT ) seeking repayment of ₹ 1,65,71,12,358.13 Crores along with interest. ICICI Bank also filed an Interim Application praying for appointment of a Receiver in respect of the mortgaged immovable assets and moveable assets of Respondent No. 2. The said Receiver was appointed to take physical possession of the movables. It is submitted that after taking possession of the entire stock by the Receiver, ICICI Bank caused the stock to be valued by Jay Jewellers and the valuation process took over six months and submitted the valuation report. Respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g hearing of Section 7 Application, the Adjudicating Authority was not concerned with the Counter Claim or the allegations made by Respondent No. 2 against Respondent No. 1 with respect to replacement of hypothecated diamonds or lower valuation stock seized by the Court Receiver of the ICICI Bank. 8. Learned Counsel further submitted that there is no misappropriation or tampering done by the Respondent No. 1 with the stock seized by the Court Receiver of ICICI Bank appointed by Debt Recovery Tribunal-1, Mumbai as alleged by the Appellant. The valuation has been done with video recording and even Respondent No. 2 was issued notices each and every time to be present at the time of valuation. The contention of the Appellant that the stock valued at ₹ 1561.87 Crores is baseless and vague. Learned Counsel further submitted that the Adjudicating Authority is only concerned with default occurred due to Respondent No. 1 by not paying the admitted financial debt to the Respondent No. 1. He submitted that the stocks were seized in accordance with the order passed by Debt Recovery Tribunal-1, Mumbai wherein the Court Receiver had seized stocks of the Respondent No. 2 and kept the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 herein is not a Financial Creditor of the Appellant. 12. The Adjudicating Authority had dealt with all the points. Learned Adjudicating Authority recorded the submissions of the Respondent No. 2 herein that the Respondent No. 2 has also filed Counter Claim bearing (L) no. 156/2018 on 05.03.2018 against Respondent No. 1 in O.A. No. 344/2017 in relation to its claims. Averments as made in this Appeal by the Appellant were also made before the Adjudicating Authority and the Adjudicating Authority had recorded all the submissions of the Respondent No. 2 herein even with regard to the complaint made to EOW and the stock which was seized by the Receiver claimed to be worth ₹ 1561.87 Crores. However, Valuation Report showed the stock was worth of ₹ 199.51 Crores Only. The Adjudicating Authority had dealt with the issues elaborately and given a finding as under: 19. Therefore, I am of the conscientious view that counter claim, that too in the nature of damages, to the amount claimed by the Financial Creditor cannot, in fact or in law, be the basis to dispute the amounts owed to the Financial Creditor. Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. Ors. Vs. Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that there has been default in repayment of the same has been admitted to some extent. It is also evident from the Reply letter of the Respondent No. 2 dated 09.05.2016 wherein it replied to the notes of ICICI Bank saying that it was facing temporary financial difficulties and that they were taking steps towards regularisation of its loan account. In view of the aforesaid reason that there is no denial of the debt amount by the Corporate Debtor. 14. The Adjudicating Authority has to see whether the ingredients of Section 7 of IBC has been fulfilled or not. Section 7(1) of IBC, a Financial Creditor either by itself or jointly with (other Financial Creditors or any other person on behalf of the Financial Creditor, as may be notified by the Central Government) may file an Application for initiation of CIRP against the Corporate Debtor before the Adjudicating Authority when a default has occurred. In the explanation a default includes a default in respect of Financial Debt owed not only to the Applicant Financial Creditor but to any other Financial Creditor of the Corporate Debtor. 2. The Financial Creditor shall make an Application under Sub Section (1) in such a form and mann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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